Dont Let Your Investors Do THIS in a Fund

The last thing a syndicator wants to have is a bunch of cash in their operating account for three, six, nine months while they’re looking for property. This is typically a strategy that first time syndicators want to do. They want to have the investor sign all the documents, sign all the offering documents, the PPM, the operating agreement, everything as you usually would, but instead of taking that $50,000 investment or $100,000 investment, you don’t take it. The reason I don’t usually recommend that is because a lot can happen between the time they make that commitment to the time you’re ready to receive the cash. I think the risk of waiting until you’re ready to receive the money to actually receive it is a big mistake. So I would not recommend taking soft commitments.

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